Issue 22: November 2016
In this issue of Setting the Example, we are pleased to announce our new ethics service that offers SMMEs an outsourced ethics practitioner and complements ethics initiatives in larger organisations. Our lead article explores the increasingly high profile topic of the ethics of power and the imperative for ethical leadership. And we share guidelines on managing gifts ethically. This issue also includes a review of a new book about ethical decision making, an interesting article about the effect of organisational scandals on executives and Cynthia Schoeman’s interview on the Auditor General’s report on irregular government expenditure.
We are pleased to introduce a new customised ethics service. For SMMEs we act as an outsourced ethics practitioner to offer a full range of quality ethics services, including review of ethics codes, ethics assessments, training and consultation. For larger organisations, we offer customised packages to complement their ethics initiatives, for example, regular ethics awareness activations, KPI-linked ethics talks and executive ethics coaching. The annual service is costed on a monthly basis based on the services required. Enquire about this service


Among the factors that are pivotal to the creation of an ethical culture, leadership is widely accepted as the most impactful. Given the extent of this influence and the problem that power can provide the opportunity for corruption, the ethics of power warrants attention. So too do we need to understand the importance of ethical leadership and what it entails because ethical leaders remain the best defence against the abuse of power and the strongest facilitators for the creation and preservation of an ethical environment. Read More...



Extract from Ethics Can by Cynthia Schoeman

The giving and receiving of gifts is especially prevalent at this time of the year. This not only highlights the question of what is and is not acceptable and ethical, but also increases the potential for abuse.

While some organisations adopt a no gift policy, many others accept that occasional gifts shared between people with whom the company does business is not unusual, but rather a part of normal social exchange.

Ensuring that the line between corruption and acceptable practice is clearly understood and that the potential for abuse is minimised warrant that organisations have a very clear Gift Policy. Read more…



by Joseph L. Badaracco Jr., Professor of business ethics, Harvard Business School

Joseph Badaracco’s recent book, Managing in the Gray (September 2016), explores the challenges of so-called gray areas in the workplace: “Every manager makes tough calls -it comes with the job. And the hardest decisions are the “gray areas” - situations where you and your team have worked hard to find an answer, you’ve done the best analysis you can, and you still don’t know what to do. But you have to make a decision.

You have to choose, commit, act, and live with the consequences and persuade others to follow your lead. Gray areas test your skills as a manager, your judgment, and even your humanity. How do you get these decisions right?”.

The Financial Times book review by Emma Jacobs provides an interesting commentary and includes the five-question framework Badaracco uses to help managers balance an analytical approach with a human one.
AG’s report on government expenditure
Listen to Cynthia Schoeman being interviewed on the massive scale of irregular expenditure by national and provincial government departments and SOEs: more than R46 billion, an 80% increase on 2014/5.


The Scandal Effect
by Bosis Groysberg, Eric Lin, George Serafeim and Robin Abrahams, Harvard Business Review, September 2016.

Research shows that executives with scandal-tainted companies on their resumes pay a penalty on the job market – even if they had nothing to do with the trouble. Read more …


The unintended opportunity of white-collar crime prosecutions
The Schumpeter article in the Economist, “Jail bait: The lock-’em-up mentality for white-collar crime is misguided”, Oct 29th 2016, exposes a new, unintended opportunity of white-collar crime prosecutions. “The global war on white-collar crime is giving rise to a new global industry: advisers such as Wall Street Prison Consultants and Executive Prison Consultants specialise in helping white-collar criminals adjust to life behind bars.”


Corporate reputations account for billions of shareholder value
The 2016 Reputation Dividend Reports reveals that US corporate reputations accounted for $3,977bn of market capitalization across the S&P in 2016 - 20.7% of all shareholder value. In the UK reputations contributed £790bn of shareholder value - 36 % of market capitalisation in the FTSE 350. The negative impact an ethical scandal can have on this value makes a strong case for the inclusion of ethics as a core facet of the organisation.

About Ethics Monitoring & Management Services (Pty) Ltd

Ethics Monitoring & Management Services was started by Cynthia Schoeman to help organisations to improve ethics in the workplace and to encourage them to manage ethics proactively. Cynthia developed The Ethics Monitor, a web-based ethics survey, which enables organisations to measure, monitor and report on their ethical status. Ethics Monitoring & Management Services also offers ethics talks, workshop, consulting and training.

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Contact us

Cynthia Schoeman
Managing Director
Ethics Monitoring & Management
Services (Pty) Ltd
011 447 7661; 082 821 3729

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